HK Budget 2018: Innovation gets a big boost with $50B investment

Hong Kong technology sector is one of the big winners in this year’s annual budget with an additional investment of HK$50 billion allotted to developing innovations in the areas of biotechnology, AI, and fintech.

In delivering the 2019 budget speech at the Legislative council yesterday, Hong Kong Financial Secretary Paul Chan said the budget was meant to “forge ahead according to the eight major directions set out by the Chief Executive” during her Policy Address last October.

“The application and omnipresence of communication technology, artificial intelligence and big data have not only spurred the birth of many new industries that operate across industries, sectors and geographical areas, as well as the emergence of the sharing economy, but also revolutionized the traditional and capital intensive business model based on tangible assets,” Chan said.

He noted new technologies facilitate business start-ups and foster new ideas, innovative products and services that generate economic benefits.

“To stay ahead of the game, we must enhance our I&T environment, attract companies from new economy sectors and research institutions to set up their presence in Hong Kong and nurture talent for a knowledge-based economy,” Chan said.

The additional HK$50 billion earmarked for the city’s technology sector is investment in Hong Kong’s long-term economic growth, and it is four times as much as the HK$10 billion allocated for ICT investment in the 2017 budget.

Specifically, the HK$50-billion budget for the technology sector is meant for the following:

$20 billion will be used on the first phase of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop for, site formation, infrastructure, superstructure and initial operation.

$10 billion into the Innovation and Technology Fund (ITF). The ITF’s financial support for I&T development in Hong Kong has increased from about $700 million in 2013-14 to $1.5 billion in 2017-18. It is anticipated that the demand for funds will continue to increase. The ITF will continue to support applied R&D work in Hong Kong with the additional resources.

$10 billion to support the establishment of two Technology Research Clusters on healthcare technologies and on artificial intelligence and robotics technologies, to attract the world’s top scientific research institutions and technology enterprises to Hong Kong for conducting more midstream and downstream R&D projects in collaboration with local universities and scientific research institutions. Such clusters will pool and nurture more technology talent in Hong Kong.

$10 billion is allocated to the Hong Kong Science and Technology Parks Corporation (HKSTPC) to reinforce the role of the Science Park as Hong Kong’s flagship technology infrastructure. Of this, about $3 billion will be used to construct research-related infrastructure and facilities, whereas the remaining $7 billion will be used for the HKSTPC to enhance support for its tenants and incubatees, and set up a Smart Campus in the Park, etc.

$200 million is earmarked for Cyberport to enhance the support for start-ups and promote the development of digital technology ecosystem. Cyberport is going to launch an “easy landing” programme to attract multinational companies (including overseas and Mainland leading internet enterprises and Fintech companies) to set up offices and R&D units in Hong Kong. It will also roll out a new support scheme, offering financial assistance up to $200,000 for each eligible start-up to conduct market research and promotion, as well as participate in business missions, trade fairs and exhibitions, etc. outside Hong Kong. The financial assistance offered under Cyberport’s incubation programme to individual start-ups will also increase by 50% to $500,000.

$100 million is allocated to Cyberport to promote the development of eSports